Who took all the fish out of the barrel?
Sat 26 Jan 2008
Much has been written about the state of the UK property market over the past 4 months and most of it either ridiculously dramatic – the end of the world is nigh or overly complacent—slowdown? What slowdown? What is true however is that we have lived through two years of a very generous market when selling property in many cases was just like ‘shooting fish in a barrel'
In mid November I was asked to debate the property market on Radio 5 live with the founder of housepricecrash.com. As you can imagine it was a lively conversation as he was insistent that the market was due to fall '30-40% in the next 3 years' (he's actually been saying this since 2002 – when he took the decision to sell his own property!) My view is that we should put the property market in perspective. Whilst I don't believe that the market will have such a dramatic correction – falling interest rates, high levels of employment, - no market continues on an remorselessly upward trend forever and all markets have a natural slow down—this is healthy and it would concern me much more if it didn't.
Let's face it; the market has changed and changed dramatically. During the last quarter of 2007, buyers were scarce, in some cases our applicants were down 60% on the previous quarter. Prices had started to fall back from record highs and there was very little activity in any sector of the market. Sellers were in denial that their property, which was already priced at more than any other property in the vicinity had sold for, were unwilling to alter their asking price and the market ground to a halt. To my mind this scenario is very similar to the state of the market following 9/11, everyone sitting on the fence, nobody wanting to be the first to jump off. All were waiting for the very obvious natural break of Christmas to make any sort of decision- and who can blame them?
What has happened in London since Christmas has made me quietly optimistic. New applicants in most of our offices are up on this time last year (when the market was flying) and in most areas transactions are once again being agreed albeit at 5-10% less than the price that the property came onto the market at. It is still a tough time as the impasse that exists between buyers and sellers continues and will continue for probably the first quarter. However agents who are worth their salt will by now be accustomed to a different market, will be speaking to and advising their clients much more and as a result will be agreeing sales and not sitting in their offices with their heads in their hands.
It is right back to a normal market, one that creates great individual estate agents and one that will make us all run better businesses.